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Obama Flips on Oil Exploration as Crude Drops

National gas prices hit 11 week low.

August 5, 2008, 08:00 pm

LANSING, Mich. -- In what amounts to a policy shift, presidential hopeful Barack Obama announced Monday that he now supports tapping some of the nation's strategic oil reserves to help curb rising gasoline prices. However, during a recent speech in Michigan, he also gave his support to long-term work on hybrid cars and renewable energy sources.

"Breaking our oil addiction is one of the greatest challenges our generation will ever face," he told an audience, according to The Associate Press AP. "It will take nothing less than a complete transformation of our economy."

His rival Senator John McCain and his campaign quickly shot back, "Tapping the strategic oil reserve is not a substitute for a real plan to increase supply through additional drilling and nuclear power," Campaign Spokesman Tucker Bounds told the AP.

As the candidates debate over ways in which to reduce the price at the pump, Bloomberg reported that crude oil fell to a three-month low as meteorologists forecast Tropical Storm Edouard will miss most offshore production facilities in the U.S. Gulf Coast while it makes it way to the Texas coast.

As a result, oil dropped three percent yesterday. The Reuters/Jefferies CRB Index of 19 commodities reported its biggest one-day decline yesterday since March. "The impact from Edouard seems very limited though storms can be unpredictable," David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney, told Reuters. "The sentiment towards oil has become bearish because of weak demand."

According to Reuters, crude oil dropped yesterday $3.69 to settle at $121.41 a barrel in New York, the lowest close since May 5. As a result, motorists found more relief at the pump as the national price for gasoline dropped to its lowest level in 11 weeks.

The Federal Information Agency reported yesterday that the price for regular, unleaded gasoline declined 7.5 cents over the last week to an average $3.88 a gallon. This marks the cheapest pump price since May 19, but still underscores a $1.04 increase from this time period last year.